As the world struggles to find enough money to help the poorest people adapt to climate change impacts, a growing share of experts say some – if not most – of the money needs to come from business sources

LUMLE, Nepal (Thomson Reuters Foundation) – Twice a week, Sonya Buddhatoki, a vegetable buyer from the district capital of Pokhara, climbs off a public bus onto the roadside of this small agricultural hamlet on a high ridge of Nepal’s Himalayan foothills.

Waiting under a tin-and-bamboo shed on the verge is the village’s harvest of the day: 200 kilos of fresh-smelling green cilantro (coriander), cabbage, chard and spring onions, pulled from the tiny terraced fields that climb up the steep hillside.

Buddhatoki and the village women who keep the community’s accounts weigh the produce on a rough wood-and-rope scale before loading it into bags to put onto the next bus back to Pokhara. Then, consulting a whiteboard listing of the day’s vegetable prices hung in the shed, Buddhatoki peels off the cash she owes the local farmers.

The village vegetable cooperative, created in 2010, has drawn Lumle’s farmers – many of them poor, low-caste dalit women who used to have only tenuous connections to markets – into the world of commercial farming. This step forward is helping them boost their incomes and adapt to changing climate conditions, including worsening hail, drought and extreme rainfall.

Laxmi Gurung, for instance, recently invested $150 of her vegetable profits, along with other women, in building a trio of 100-square-metre bamboo shelters covered in hail-resistant plastic and fitted out with drip irrigation fed by a community water storage system.

Last season, her cucumber plants were destroyed by hail. “I lost it all,” she rued. But this season, she hopes to earn $400 to $500 from the tomatoes she’s nurturing under the new protective roofing. Tomatoes are one of Nepal’s most valuable crops – but are also highly vulnerable to hail damage.

“I hope it will work for us, though it’s too early to tell,” said the slim farmer with a weathered face, traditional red Nepali robe and dozens of gold rings piercing her ears.

“These days when it’s not raining, we have drought, or lots of hail. We are feeling this climate change,” she observed. “So we are leaving behind what we used to do, to try to earn more income.”

FOR-PROFIT ADAPTATION

As the world struggles to find enough money to help the poorest and most vulnerable communities adapt to climate change impacts, a growing share of experts say some – if not most – of the money needs to come from business sources.

For-profit adaptation, they say - like that happening in Lumle - is more sustainable and less vulnerable to the whims of governments and other donors, although aid money is often needed to get it going. And expanding what works – from small-scale agriculture to insurance and microcredit – becomes easier when doing it creates a financial return, argued speakers at the 8th Annual Community-Based Adaptation Conference in Nepal this week.

The gathering, which ends on Wednesday, plans to issue a declaration on financing local adaptation efforts, including recommendations for private investment.

Non-governmental organisations (NGOs) want to provide services to the poor “but often that creates more vulnerability and dependency”, said Olga Petryniak of CARE Ethiopia. Her agency is working to expand private services like veterinary care and farm supplies into remote rural Ethiopian communities, in part by offering companies small initial grants to cut the risks of branching out.

“We need to make the power of markets work for community-based adaptation to really deliver at global scale,” added Colin McQuistan of Practical Action, an international development charity.

An increasing number of developed-world countries now argue that much of the $100 billion a year by 2020 they have promised poorer nations to help them develop in a low-carbon way and adapt to the effects of climate change must come from businesses rather than cash-strapped government budgets.

“Organisations (and government) can’t do it alone. The private sector has expertise, technology, great investments,” insisted Thomas Loster, chairman of the Munich RE Foundation, which promotes insurance as climate adaptation, among other initiatives. “The challenge is how to get them involved.”

SKEPTICISM

But not everyone thinks handing over much of the responsibility for providing climate finance to business is a good idea or even possible - particularly when it comes to funding adaptation, which usually needs to be specific to individual locations and locally driven, and can be very hard to scale up.

“I’m extremely skeptical” that private finance could work for adaptation, said Brandon Wu, who tracks climate finance issues for ActionAid USA, a charity that works to end poverty. The likelihood that communities can pay back any private investment is relatively small and uncertain, he said, particularly in the face of worsening climate impacts such as more extreme weather and disasters.

And if big companies do find ways to fund adaptation where the returns are sufficient, that could mean replicating something that may work well in one area but less so in another, which “seems really dangerous”, Wu said.

Then there’s the issue of essentially forcing communities to pay their own adaptation costs, something Wu said is out of line with the view that richer polluting countries should assist poorer communities who bear little responsibility for the climate change that is dramatically affecting their lives.

The suggestion that $100 billion a year in climate finance should be largely private money “is a totally unacceptable stance”, he said.

ROLE FOR SMALL BUSINESSES

But seeking out private-sector finance for adaptation doesn’t just mean turning to corporate giants, experts emphasised at the Kathmandu meeting on Monday.

“When we talk about the private sector, we often think about big business,” said Petryniak of CARE Ethiopia. “But we have to remember that agricultural producers, pastoralists and small and medium enterprises are part of the private sector themselves.”

Luke Colavito, the Nepal director for iDE, an international NGO focused on improving rural livelihoods –and the organisation that helped Lumle’s vegetable cooperative get started – said that in remote areas, where markets for local products are weak or non-existent, businesses can spur effective climate adaptation simply by offering poor people more reliable incomes and options.

“Extending the private-sector reach that last mile to where the poor and vulnerable communities are located is where the private sector can play a very big role,” he said.

In Lumle, for instance, 250 families now belong to the vegetable co-op, which has an associated farmer-run savings and credit association providing cheap, market-rate credit to local farmers and families. The community has also developed links with agricultural supply dealers, which makes getting quality seed and fertiliser easier, and gives farmers access to up-to-date technical knowledge.

“Smallholder farmers are the private sector too,” noted Gernot Laganda, a climate change adaptation specialist at the International Fund for Agricultural Development. “They are not just victims of climate change but agents of change.”

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